By Lehlohonolo Lehana.
The Department of Energy has published the latest fuel price update for September, showing a sizeable cut to both petrol and diesel prices in South Africa.
While prices were projected to come down by around R2.30 per litre, an adjustment to the slate levy has eaten 30 cents per litre of the price cut, resulting in a price drop of R2.04 per litre for petrol, and between 46 and 56 cents per litre for diesel.
This will lower the price of 95 petrol in Gauteng to R23.38 a litre, from a record high of R26.74 in July. That said, petrol cost only R19.61 at the start of the year.
The department says the decrease in diesel is less than that of petrol because “the middle distillate market is still tight and there is a looming fuel switch from gas to oil for heating purposes as winter season approaches in the Northern Hemisphere. This has increased demand for middle distillates”.
The changes will be implemented on Wednesday, 7 September.
The average international product prices for petrol, diesel and illuminating paraffin decreased during the period under review.
This led to a lower contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 12.97 c/l, 15.63 c/l and 15.90 c/l, respectively.
The combined cumulative petrol and diesel Slate balances at the end of July 2022 amounted to a negative balance of R13.168 billion; however, the department has approved a Slate Levy of 83.68 c/l (an increase of 30.66 c/l) to be implemented into the price structures of petrol and diesel with effect from 07 September 2022.
The fuel prices are determined by the price of oil and the rand-dollar exchange rate.
The average Brent oil price fell from $105 a barrel in July to $94 in August. The department says this was mostly due to a global economic slowdown, and the pandemic lockdowns in China.
Meanwhile, the rand, which started August at around R16.60/$, has since crashed through R17.30 on Friday amid expectations that the US will keep interest rates higher for longer. The rand was trading at R17.24/$ on Monday.